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Is now a good time to buy Bitcoin in September 2020? How will Bitcoin do for the rest of 2020?

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Written by   117
2 years ago

Yes, I’ve been saying for months that it’s not a good time to buy Bitcoin since May 2020 when Bitcoin to $10,000, because of high fees and market insecurities unless proven otherwise.

Now, 4 months later Bitcoin is still at $10,000, however, now it is a good time to buy Bitcoin. Why? For two reasons.

1. Scalability bottleneck is a problem. but has proven to leave enough room to reach $15,000

Over the last couple of months, the market has shown that a 35% increase from $9,000 to $12,500 within 30 days like in August, does not increase fees past $6.

This is sufficient proof to ensure market safety due to scalability issues and high fees.

This also allows the statement that a 30% increase to $13,500 within 30 days, a slow 50% increase to $15,000 within 2 months from September to November is possible without too high fees and only a subsequent quick increase to $16,000-$18,000 in December should cause troubles with $20-$50 fees again.

2. Post-Halving Effect
We are now following the exact same pattern as in the previous Halving from 2016, which should lead us to challenging previous ATH of $20,000.

Have a look at the price movement in the years before and after the previous Halving (green) and the current Halving (red).

It is following the exact same pattern.

  1. A big drop after the last ATH by 85% from $1,165 to $152 just as this time from $20,000 to $3,100

  2. Recovery from this low back to 55% of ATH of $600 or $10,500 4 months after the Halving (now).

  3. By January 17th 2017, the price had increased by 67% since the Halving to $1,150, just 1% below previous ATH of $1,165 from 2013.
    After the rejection, the price dropped by 40% to $670, back to the Halving 2016 price again.

  4. This means, in December 2020/January 2021, we could challenge ATH and see $16,000-$19,000 again and then get rejected by the $20,000 resistance and fall back to the $10,000-$12,000 range again.

Bitboy has given an in-depth analysis into this as well. By his analysis, we should challenge and get rejected by $20,000 ATH on December 23rd, just 1 day before Christmas.

With Grayscale buying up 50% more than Bitcoins are being mined every month, sell walls are very thin and buying pressure is simply strong. This all makes it easy for Bitcoin to put up and makes $16,000 prices a very realistic scenario and the market has shown that fees will not be such a major issue until then.

Critical Analysis

Now, I believe this is all possible.

However, once we’re past $15,000, fees will become a huge issue and one of the main reasons why we won’t be able to pass $20,000 and fall back to low $10,000s again.

After that, fees will remain a big issue, because after seeing such a big run up to $20,000, interest and volume will have doubled again compared to now.

So, the next 4 months will very likely be big pumps and big dumps, a Mekka for day traders, but much less so for those who aren’t able check crypto prices 10 times a day.

I’ve been following the Ember Quant fund for a while to see if the algorithm actually delivers and it did, it just keeps going up and up without the user having to do anything.

Also, in the last fall from $12,000 to $10,000 perfectly by selling at $11,700.

As you can see it has significantly outperformed Bitcoin by taking advantage of its large volatility.

It does that by measuring a combination of on-chain data with Moving Averages and momentum indicators (RSI/MACD) across different time intervals. The algorithm also keeps learning and adjusting depending on market conditions.

In other words, when Bitcoin goes up by approximately 5%, the quant fund buys Bitcoin. When Bitcoin goes down by 5%, it sells all Bitcoin to USDC.

This is a fool-proof way to keep your crypto safely while still having most of the upside.

Additionally, whenever the Quant fund sells the Bitcoin to USDC, you automatically get 8% APY interest on your USDC as well, because the Quant fund directly uses the USDC for lending.

This is why it’s especially useful for investors who don’t want to check crypto prices every day, but just let it run for a year or two and then get back to it.

Normally, just letting crypto run is a very bad idea, because Bitcoin can go up by 1,000% and crash all the way down again and if you don’t check the prices, you could not take advantage of this large volatility at all.

However, with the Quant fund, you would always catch the spike up and you would always sell before the spike down.

The only time, where the Quant fund can make losses is in times of low volatility, when Bitcoin keeps oscillating in 10% ranges between $10,000 and $11,000 for several months for example. This happens sometimes, but if you look at the Bitcoin chart, 80%-90% of the time, it doesn’t happen.

Conclusion

Bitcoin is looking very promising right now at $10,500 and we could challenge ATH in December/January again.

For those that don’t want to day trade, those that have a day job and can’t follow crypto at all times, the Ember Quant fund is a very good choice.

What does this mean for altcoins? If Bitcoin goes up so much, big caps will go up with Bitcoin just like it did last year, however, for small caps it will probably a bit difficult.

When Bitcoin then drops by 50% after challenging ATH, all altcoins will suffer heavily. That’s why it’s super important to gradually reduce altcoin percentages once Bitcoin goes past $15,000.

This means, the remainder of 2020 will probably be the time for Bitcoin and not so much for altcoins.

However, we will probably see good altcoin gains for the rest of September before Bitcoin starts the engine for the 2020 run up in October 2020.

I think Ethereum will also not be a good pick for the remainder of 2020 due to its unbelievably high fees despite ETH 2.0 now launching in November, because ETH 2.0 does not increase scalability or decrease fees at all. I would rather pick BNB instead of ETH as a big cap coin.

This opens the market for second layer solutions such as MATIC or LRC.

Now, lots of things to read in this post. Make sure to read and understand it thoroughly, this is the guideline for the rest of 2020.

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Written by   117
2 years ago
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Comments

Thanks for such a detailed and exhaustive btc analysis.

$ 0.00
2 years ago

Ubava analiza za dvizenjeto na vrednosta na bitcoinot. Dali kje se ostvarat predviduvanjata za rastot na cenata na bitcoinot do krajot na ovaa godina...zivi bili pa videli. Inaku dobro bi bilo da dostigne vrednost do 20000$.

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2 years ago

Thank you very much for the post and guidelines, useful information, for sure!

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2 years ago